House Purchase Successful!
Posted: Fri Sep 30, 2022 9:53 am
So my house hunting venture in the city of Edmonton has proved successful.
I got an accepted offer for a single family home here in the city for $460,000. We just passed inspection with no surprises. The house is built in 2019 with 4 beds and 3.5 baths. The main floor and second floor are the "consumption" component of the house. The rental suite in the basement and the land are the "investment" component of the purchase.
I'm really digging this city. It's got a population of about 1 million people, so while it's not small, it's definitely not the same metropolitan vibe as Vancouver. People here are quite friendly; just about everyone smiles when you cross paths with them on the street. The food scene is surprisingly good. And, of course, Edmonton is home to Canada's largest shopping mall -- West Edmonton Mall. It literally has its own water park in it.
Before my old man passed away, he was gearing up to start a real estate portfolio and wanted to start with a rental property. I feel like this purchase, with its modest little basement suite, is the start of that.
The rest of my money will go into the PP, naturally. I think I'll consider this whole rental property thing to be my VP play of choice.
The basement suite rented to the previous tenant for $900/month, while the main living area rented for $2000. I figure if I ever run into financial trouble I can retreat to living in the basement suite and just rent out the main living area for increased income. Worse comes to worse, if I really don't like this city I can just rent both levels out and go back to Vancouver. Grossing $2,900 per month on a $460,000 purchase is decent cash flow.
$2,900/month x 12 months = $34,800 per year gross
$34,800 - $5,400 property tax/insurance = $29,400
$29,400 - $0 mortgage payments (no mortgage) = $29,400
$29,400 - $4,600 annual maintenance (1% rule) = $24,800
$24,800 / $460,000 = 5.39% capitalization rate
Not that I plan on renting out both levels. I'm going to give Edmonton a real shot and build a forever home here.
I got an accepted offer for a single family home here in the city for $460,000. We just passed inspection with no surprises. The house is built in 2019 with 4 beds and 3.5 baths. The main floor and second floor are the "consumption" component of the house. The rental suite in the basement and the land are the "investment" component of the purchase.
I'm really digging this city. It's got a population of about 1 million people, so while it's not small, it's definitely not the same metropolitan vibe as Vancouver. People here are quite friendly; just about everyone smiles when you cross paths with them on the street. The food scene is surprisingly good. And, of course, Edmonton is home to Canada's largest shopping mall -- West Edmonton Mall. It literally has its own water park in it.
Before my old man passed away, he was gearing up to start a real estate portfolio and wanted to start with a rental property. I feel like this purchase, with its modest little basement suite, is the start of that.
The rest of my money will go into the PP, naturally. I think I'll consider this whole rental property thing to be my VP play of choice.
The basement suite rented to the previous tenant for $900/month, while the main living area rented for $2000. I figure if I ever run into financial trouble I can retreat to living in the basement suite and just rent out the main living area for increased income. Worse comes to worse, if I really don't like this city I can just rent both levels out and go back to Vancouver. Grossing $2,900 per month on a $460,000 purchase is decent cash flow.
$2,900/month x 12 months = $34,800 per year gross
$34,800 - $5,400 property tax/insurance = $29,400
$29,400 - $0 mortgage payments (no mortgage) = $29,400
$29,400 - $4,600 annual maintenance (1% rule) = $24,800
$24,800 / $460,000 = 5.39% capitalization rate
Not that I plan on renting out both levels. I'm going to give Edmonton a real shot and build a forever home here.
?
